Selecting Your Export Market
You may have a legitimate wish to supply your products/services to the world markets. However, to be present in all or many markets you must first succeed in one market. This can be a neighbouring country of your Regional Economic Community (COMESA/SADC) or an overseas market in the European Union, North America, Middle East, Asia, amongst other markets.
It is advisable to focus your resources in successfully and sustainably penetrating one export market, prior to expanding your market outreach to other countries.
ZimTrade will be present, all the way, to provide you hand-holding assistance in your export journey.
We advise you to select a high potential and low-risk market which is most suitable for your products/services. This can be a small market, a country or a city within a country. In either case, you need to know your targeted market in great detail, through structured market research so as to minimise risks and costs of venturing into the new market.
Caution: Avoid making assumptions
Each market has its own specifications. You will need to adapt your product to suit the requirements of the target market(s).
A GUIDE TO SELECTING A MARKET FOR YOUR PRODUCT/SERVICE
This guide will help you explore all the critical avenues and issues you should know about a market before entering the market. Some of these critical issues that need careful investigation are:
- TRADE POLICIES
You should know the market access conditions that govern trade between Zimbabwe and the target market in terms of existing trade agreements (bilateral, regional or multilateral) and the benefits thereof. These could be trade agreements offering preferential treatment (Preferential Trade Agreement), duty free treatment (Free Trade Agreement), defined benefits under the Generalised System of Preferences (GSP), or Most Favoured Nation (MFN) treatment, under WTO rules. These agreements offer varying degrees of preferential market access to Zimbabwean products/services in terms of duty and quota treatments. Click here for Trade Agreements of Zimbabwe.
- COUNTRY FEATURES
Gather information on the geography of the country, where it is located, how to access it, its main cities and towns, level of urbanisation and vital statistics on the country’s demography, namely population size, make-up, per-capita income, spending power and patterns.
To get updated facts and figures about the target market, visit the website of the country’s National Statistics Office, for example ZimStat.
- BUSINESS ENVIRONMENT
Information on the country’s Political, Economic, Social, Technological, Legal and Environment (PESTLE) framework is critical in deciding your level of engagement in the market. We strongly advise that you conduct research on the above variables and understand possible implications on your proposed export business. There are many sources of information on the business conditions of a country, some of which are: World Bank Publications, IMF Reports, CIA World FactBook, specialized magazines, academic papers and several online search engines.
- BUSINESS CULTURE
It is vital that you understand the target country’s business practices in terms of language, culture, values and business ethics. We advise you to familiarise yourself with these values, ethics and cultural aspects of doing business.
- DEMAND CONDITIONS
To estimate the potential of the target market for your product/service you should understand market size, possible growth. You should also understand how the market is currently serviced, either from the domestic supply or from imports.
- KNOW YOUR COMPETITORS
You should carefully investigate all sources of competition in the target market, be it local or international and their respective markets. Additional information can be obtained from ITC-Trade Map.
- REGULATORY FRAMEWORK
Each country and Regional Economic Community has its own regulations on compliance issues such as health and safety, labour laws, social, environmental and product standards.
- DISTRIBUTION CHANNELS
You must know who the main players in the target market are, what share of market they hold and how the distribution channel is organised. Such knowledge will assist you to plan your market entry.
- TRADE LOGISTICS
You must investigate all the logistics available or required to successfully do business in the target market in terms of air/sea connections, internal transport, freight rates, documentations and travel & visa requirements.
- RISK FACTORS
Apart from knowing the opportunities that the target market offers, you should also explore the risk factors and challenges of doing business in the market.
Caution: All information gathered through your research will assist you to prepare your marketing strategy.
However, it is always advisable to visit the country to confirm your findings prior to signing any contracts or making your first shipment.
ZimTrade has prepared a Market Research Template and a Guide to Market Research to help you conduct your own market research on your target market(s).